POLITICAL UNKNOWNS CAUSE CRE INVESTORS TO PAUSE
Though U.S. commercial real estate valuations rebounded in February from a slow start to the year, pricing growth in all five property sectors slowed again in March as investors proceeded with caution amid domestic and geopolitical uncertainties. Unlike 2016’s strong activity where rising commercial prices reflected a robust market and investor confidence in the industry’s outlook, the minimal growth experienced this year is evidence that investors may be less enthusiastic.
From Feb. 22 to March 22, commercial valuations rose by a mere 0.1% month-to-month — though that is still up 8.4% year-to-year, according to the latest Ten-X CRE Nowcast, which uses proprietary technology, Google trends data and investor surveys to determine what is happening with U.S. CRE pricing in real time. Ten-X chief economist Peter Muoio said myriad geopolitical uncertainties are causing investors to pause — from the policies being pushed in the White House to the trigger of Brexit coupled with several European countries’ elections.